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When do you Owe Interest on Credit Card Transactions in Ohio
Consumers oftentimes assume they owe interest on their credit card purchases automatically. Creditors are very happy to take advantage of this incorrect assumption. In reality, a consumer only owes interest on loans or purchases if he or she agreed to pay interest, and the agreement is reflected in a contract (oftentimes the cardmember agreement). If the creditor cannot supply the court with the cardmember agreement reflecting the agreement to pay interest as well as the terms of the agreement such as the percentage rate, then it is not entitled to charge interest.
Many times, the creditor cannot produce this agreement and attempts to rely on the billing statements. The Ohio Supreme Court has weighed in on this issue many times and ruled a billing statement is not enough to evidence an agreement to pay interest.
Even if the creditor is able to produce a written contract where a consumer agreed to pay a specific interest rate, it still may have waived its right to interest. Frequently a bank will charge-off a consumer’s account. While this does not preclude the creditor’s right to the principal and interest it has already charged, it does result in a waiver of future interest, penalties, and late fees. The creditor will not be able to charge interest from the time of charge-off until it reduces the debt to a judgment, and then the creditor will only be able to charge the statutory interest rate rather than the contract rate, which is normally much higher.
There are many defenses to a credit card lawsuit. Some defenses may preclude the creditor from obtaining a judgment at all, and some, such as this one, may substantially reduce any award that is rendered.
A Skilled Ohio Debt Lawyer Can Help You
At Luftman, Heck & Associates, we take pride in our ability to help Ohioans overcome their debt issues. Proper planning, knowledge of your rights, and in some cases, legal action, can remove the cloud of debt over your life. Don’t wait for your loans to go into default before taking action. If you are worried that you cannot meet your debt obligations, an Ohio debt lawyer can help. Contact our office today at (888) 726-3181 for your free consultation.